Right about now, management teams from firms all over our industry are gathering around conference tables to make plans for next year. And one of the key items on every one of those agendas is, “What’s our sales* goal for 2023?”
[*For those of you afraid of the word “sales,” insert “revenue” here.]
Too often, the management team will defer to the president or CEO, who picks a number ‘out of the air’ because that’s what he/she would like to see happen in the next year. Sadly, very little thinking has gone into the president’s sales goal… it’s mostly gut feel and hope.
Don’t be that executive. Take a little extra time to set more well-thought-out and – ultimately – more accurate sales goals by considering the three different parts of setting those goals:
#1. Revenue from Existing Clients
The first priority of your sales function should be to shore up your current client base. Most firms in our industry, have a fairly finite number of clients… maybe 20, 30 or 40. If that’s the case for you, conduct an account-by-account review of every one of them, discussing:
- General knowledge of the client. For example, what’s your ‘share of wallet’ there? What’s trending in their industry? Do they have any new products in the pipeline? How are your relationships throughout the organization? Are there opportunities for cross-selling and up-selling? Etc. This fundamental knowledge will help in your decision making.
- What was your revenue with them in 2022? (And in 2021 and 2020, for that matter?)
- 2023 Sales Goals. Based on where that client is now and what you know about them, what level of sales can you achieve there in 2023?
- And most importantly, how are you going to achieve that goal? That is, what are the detailed activities – for each client – you will use to hit the sales goal you wrote down above?
- Now, add up the sales goals for each of those clients and Part 1 is done.
#2. New Business Acquisition
Now that your core business is secure, it’s time to go after some new revenue. How? Back into it… start with the sales goal in mind, then figure out the level of activity you need to achieve to get there.
- Let’s say you want to get to $500,000 in new business next year. And you know that your average project size is $50,000… so you need 10 new projects in 2023 to achieve that goal.
- And since you win about 40% of your bids, you’ll need to submit 25 proposals next year.
- And since you’re asked to submit a proposal after about half of your capabilities presentations, you’ll need to deliver 50 of those next year. That’s about one every week.
- And capability presentations come after conversations with prospective buyers… and those conversations are a result of follow-up on sales leads that are generated.
See where this is going… your sales goal for new business is really about setting goals for all of the activity leading up to it. So, here’s the real question… How many new sales leads can your firm generate next year… and how are you going to do it?
#3. ‘Subset’ Sales Goals
While the sales goals detailed above are client-focused (and that’s a good thing), sometimes, you need to be a little self-centered and set some goals that are internally focused. These could also be viewed as “subsets” of the primary sales goals above and ladder-up to help achieve them. For example:
- Revenue by product/service line: to support a newly-launched service line or one that might be lagging a bit.
- Revenue by industry/market served: to support the industry where you claim specialization or one that also might be lagging a bit.
- Revenue by sales rep/seller-doer: especially if you have a team of them and are paying commissions.
- Revenue by geography: particularly for those larger organizations with a global footprint.
When you drill down like this, you provide yourself the opportuointy to be more specific with the kinds of activities you’ll use to achieve your goals.
As we started off this article, now is the time to start crafting your growth plans for next year. But as you do that, take just a little extra time to carefully set your sales goals and then use them to guide your growth activities.
Make 2023 the year you get serious about selling!
Are you a researcher, project manager, practice leader or business owner who’s gotten ‘stuck’ with the responsibility of growing revenue… and could use a little help improving your sales effort (and results)? Our online SELLER-DOER WORKSHOP™ can help. Go to: http://www.SellerDoerWorkshop.com for all the details.